New Delhi: Indian economy is expected to grow at 7.2% in 2018-19 against 6.7% in the previous fiscal mainly due to improvement in the performance of agriculture and manufacturing sectors, the Central Statistics Office (CSO) said on Monday.
The CSO estimate is, however, a bit lower than 7.4% growth projected by the Reserve Bank for the current fiscal. Releasing the first advance estimates of National Income for 2018-19, the CSO said, "The growth in GDP during 2018-19 is estimated at 7.2% as compared to the growth rate of 6.7% in 2017-18." The gross domestic product (GDP) had expanded by 7.1% in 2016-17 and 8.2% in 2015-16.
"Real GVA (Gross Value Added) is anticipated to grow at 7% in the current fiscal as against 6.5% in 2017-18," it said. Describing the 2018-19 GDP growth projection 'very healthy', economic affairs secretary Subhash Chandra Garg said India has continued to remain the fastest growing economy in the world.
"Very healthy advance GDP growth numbers for 2018-19. GDP grows by 7.2% compared to 6.7% in 2017-18. India remains the fastest growing major economy globally. At current prices, GDP grows by 12.3% rising to 188.41 lakh crore. Per capita GDP at current prices rises to Rs 1,41,447," Garg said in a series of tweets. He further said an increase in gross fixed capital formation (GFCF) indicates a pick up in investment activities.
"Especially gratifying, impressive and promising is the growth in gross fixed capital formation (GFCF). 12.2% real growth in 2018-19 compared to 7.6% in 2017-18 heralds excellent pick up in investment activity. GFCF as a ratio to GDP has risen to 32.9% from 31.4% in 2017-18," he said. According to the CSO data, the expansion in activities in 'agriculture, forestry and fishing' is likely to increase to 3.8% in the current fiscal from 3.4% in the preceding year. The growth of the manufacturing sector is expected to accelerate to 8.3% this fiscal, up from 5.7% in 2017-18.
However, the mining and quarrying sector growth rate is estimated to decline from 2.9% in 2017-18 to 0.8% in current fiscal. Trade, hotels, transport, communication and services related to broadcasting will too witness deceleration to 6.9% from 8% in the previous fiscal.
The growth rate of public administration, defence and other services will also dip to 8.9% from 10% last fiscal. Electricity, gas, water supply & other utility services growth is estimated at 9.4% in 2018-19, up from 7.2% in the last fiscal. Similarly, the construction sector is expected to grow at 8.9% from 5.7% previous fiscal. Financial, real estate & professional services' growth will be a tad higher at 6.8% this fiscal against 6.6% in 2017-18. According to the CSO estimates, the per capita net national income during 2018-19 will be Rs 1,25,397, showing a rise of 11.1% as compared to Rs 1,12,835 during 2017-18 with the growth rate of 8.6%.
Gross Fixed Capital Formation (GFCF), a barometer of investment, at current prices is estimated at Rs 55.58 lakh crore in 2018-19 as against Rs 47.79 lakh crore in 2017-18. At Constant (2011-12) Prices, the GFCF is estimated at Rs 45.86 lakh crore in 2018-19 as against Rs 40.88 lakh crore in 2017-18. In terms of GDP, the rates of the GFCF at Current and Constant (2011-12) prices during 2018-19 are estimated at 29.5% and 32.9%, respectively, as against the corresponding rates of 28.5% and 31.4%, respectively in 2017-18.
The discrepancies in the GDP estimates for current fiscal has been pegged at Rs 1,49,331 crore as against Rs 2,23,504 crore in 2017-18. The Government Final Consumption Expenditure (GFCE) at Current Prices is estimated at Rs 21.70 lakh crore in 2018-19 as against Rs 19.08 lakh crore in 2017-18. At Constant (2011-12) Prices, the GFCE is estimated at Rs 15.28 lakh crore in 2018-19 as against Rs 14.0 lakh crore in 2017- 18.
In terms of GDP, the rates of GFCE at current and constant (2011-12) prices during 2018-19 are estimated at 11.5% and 11%, respectively, as against the corresponding rates of 11.4% and 10.8%, respectively in 2017-18. Crisil Chief Economist Dharmakirti Joshi said revival in private investment is critical to sustaining the upswing in overall investments.
"Improvement in private consumption demand and a stable election outcome will play an important role in that. Private consumption was a sore spot with its growth slipping anew to 6.4% from 6.6% as farm incomes and rural wage growth remained weak," he said. The real agriculture GDP growth was strong at 3.8% but nominal growth fell to 3.8% from 4.5% suggesting farmers are realising less from their produce, he said.
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